Govt to introduce single-window platform for labour law compliance
Govt pledges to break ‘last bastion of inspector raj’, make it easier to do business in India
New Delhi: The government will introduce a single window to help businesses meet compliance requirements for a raft of labour laws, it said on Monday while pledging to break the “last bastion of inspector raj” and make it easier to do business in India.
The single window—a website—will help simplify the process of labour compliance, effectiveness of inspection and redressal of grievances, labour minister Narendra Singh Tomar said. He told reporters that while his ministry will ensure the welfare of workers, the government will improve the ease of doing business and amend outdated labour laws.
Since coming to power in May, the National Democratic Alliance government has sought to tackle the contentious issue of reforming India’s antiquated labour laws.
“The inspection system will improve and a single platform will help in integrating labour law compliance in a simple manner,” said Tomar. “We want to break the last bastion of the inspector raj,” added labour secretary Gauri Kumar.
Industries have been complaining about restrictive labour laws, saying excessive inspection—the so-called inspector raj—has created a sense of unease among industrial houses.
About 175,000 inspections are carried out annually by four central organizations—the the central labour commission, the Employees’ State Insurance Corporation, the Employees’ Provident Fund Organisation and the Directorate General of Mines Safety.
So far, companies that are inspected have been selected locally and without any specific criteria.
The new computerized inspection scheme is designed to make labour inspections more effective and transparent. A central analysis and inspection unit will be set up in each of the four organizations to analyse complaints from businesses centrally, and going by data and evidence, the labour ministry said.
Instead of labour inspectors using their own discretion for picking companies for inspections, a random computerized method will be used, which will help cut down the number of complaints of harassment significantly, Tomar said. Within three-five days of an inspection being conducted, the report will be uploaded on the website—described as “an integrated web portal”—putting the information beyond the reach of the inspector to modify on his own.
Mahesh Gupta, managing director of Kent RO Systems Ltd, a manufacturer of water purifiers, said the inspector raj creates fear among industries and efforts should be made to reduce it as much as possible. “You need to focus on business than fear some inspectors who come to check you as per their wish,” said Gupta, adding that the manufacturing sector needs to be promoted if India wants to create more jobs.
Tomar said that initially 16 labour laws including the Factories Act and the Minimum Wages Act will be brought under the single-window compliance process. Each business establishment or employer will be allotted a unique labour identification number (LIN) for online registration on the website. Complete information on 1.1 million establishments is “being collected, digitized and de-duplicated”. The labour minister said in the last couple of weeks alone, 4,700 companies have been registered.
“With the given LIN number, the employer will be prompted about the applicable Acts and be able to file a single unified annual return instead of filing separate returns under individual Acts. This will be a step forward in promoting the ease of doing business,” the ministry said in a separate statement.
The website will also provide for an online grievance redressal system, and contribute “proactively to achieve the objective of compliance of labour regulations and harmonizing compliance across labour Acts”, the ministry said.
The initiative is aimed at helping businesses cut through a maze of labour laws.
There are 44 central labour laws and many of them are decades old. Industry believes these archaic labour laws are restrictive and hamper the growth of industries, especially the manufacturing sector. Prime Minister Narendra Modi in his Independence Day speech last month said the manufacturing sector needs a boost to promote job creation and called upon foreign companies come and “make in India.”
Tomar said his ministry is reviewing labour laws that are not up-to-date. “We have already moved to amend three laws, and if there is any need, we will take the right steps, too,” he asserted.
The Union cabinet has approved amendments in three key labour laws—the Factories Act, 1948; the Apprentices Act, 1961, and the Labour Laws (Exemption from Furnishing Returns and Maintaining Registers by Certain Establishments) Act, 1988. The first two amendments have already been introduced in Parliament.
“This single-window compliance and reducing the inspector raj schemes are designed to benefit employers than employees. I don’t think by doing this it will bring any relief to the workers’ community. The government has not consulted us over this and we (all national trade unions) are going to have a national convention on 15 September, and take up all issues,” said B.N. Rai, president of the Bharatiya Mazdoor Sangh, the national trade union associated with ruling Bharatiya Janata Party.
Editor's Picks »
- Motherson Sumi continues to face margin pressure in foreign markets
- What the Warren Buffett indicator tells us about market valuations today
- Jet Airways lands with a thud in Q4 as fuel costs increase
- IBC amendments: Some dilutions, and a lot more speed
- Patanjali’s gambit is paying off in toothpaste wars